The national minimum wage in the United Kingdom

Abstract:

This study assesses the context and development of the British NMW and the evidence of its impact. The study outlines the earlier system of Wages Councils, abolished in 1993 as part of the British Conservative Government’s policy that, from the early 1980s, had deregulated much of the British labour market. It explains how the campaign for a National Minimum Wage developed and attracted support from the trade union movement and Labour Party. It details the debate that took place in Britain about the impact of a minimum wage and the arguments for and against its implementation. It then describes the NMW legislation that was introduced in 1998 and the role the minimum wage plays in the New Labour Government’s ‘make work pay’ strategy. It reviews the reports produced by the independent Low Pay Commission that makes recommendations to Government about the rate and coverage of the minimum wage in light of prevailing economic circumstances and the representations of interested groups. This study also outlines the impact of the NMW on earnings, wage differentials, employment levels and poverty. It further explains how the NMW is enforced and considers related issues concerning the position of low paid workers earning less than the minimum wage. Finally it explains about a continuing debate on the rate at which the NMW should be set and enforced.